The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Strengthening Public Financial Management in Rajasthan (P156869) SOUTH ASIA | India | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 3 | ARCHIVED on 20-Mar-2020 | ISR40233 | Implementing Agencies: Department of Economic Affairs (MOF), Republic of India Key Dates Key Project Dates Bank Approval Date: 01-May-2018 Effectiveness Date: 26-Jul-2018 Planned Mid Term Review Date: -- Actual Mid-Term Review Date: Original Closing Date: 31-Mar-2024 Revised Closing Date: 31-Mar-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is: "to contribute to improved budget execution, enhanced accountability, and greater efficiency in revenue administration in Government of Rajasthan". Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening Public Financial Management Framework:(Cost $6.00 M) Strengthening Expenditure and Revenue Systems:(Cost $21.65 M) Project Management and Capacity Building:(Cost $3.30 M) Front End Fee:(Cost $0.05 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions 1. There is continued ownership of Finance department and the implementing line departments in undertaking critical reforms under the project such as establishment of commitment control, Business process re-engineering of transport department – some of which are being undertaken at sub-national level for first time. 2. The project implementation, however, after starting on a promising note, has slowed down in the last year 3. To ensure that the project regains the momentum and re-energize the project implementation and coordination to allow for planned reforms to take deep root and be mainstreamed across the government, following measures have been suggested: a. Procuring Independent verification Agent (IVA) by January 31, 2020 to facilitate disbursements against DLRs b. Enhancing coordination amongst various implementing departments under the project to help achieve the agreed results. c. Planning for committing 80% of project funds by end of second year (June 30, 2020). 3/20/2020 Page 1 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) d. Developing TORs/specifications/procurement plan accordingly and initiating procurements for these at the earliest. e. Restructuring the consultancy contract for Data for Policy Action (DPA) component as needed to expedite the assignment. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes Project Development Objective IN00792348 ►Strengthened budget execution by improving controls over commitment (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Expected to be Consultancy for achieved soon. commitment control is Explanation: The final proceeding well and a CCS being used in 20 Commitment Control draft of Commitment (twenty) departments Policy and the Control Policy has been covering 90% of their Commitment Control Procedures Manual Value submitted on which capital expenditure System does not exist will be produced extensive comments above threshold as incorporating the have been provided. This established by the comments/suggestions will be finalized by policy of the Bank, the Budget Division soon and Project Management submitted to Bank. Committee and the 3/20/2020 Page 2 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Users based on the pilots. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792349 ►Institutional strengthening (IS) of Local Fund Audit Department (LFAD) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The As-Is & Gap- Status: Expected to be Analysis as a part of the achieved soon. Framework for LF&AD Explanation: The time- has been prepared which bound Draft includes a time-bound Strengthening action- action-plan as well as the plan and LFA Manual draft Strengthening Plan. have been prepared. The online Audit The online Audit New framework Management System Management System Outdated audit manual followed in all Regional (AMS) has been (AMS) has been Value and processes and no Offices of LFAD and developed and is now developed and is automation. audit process migrated ready for pilot testing. (to under pilot testing. The to AMS be commenced from strengthening plan, the June01, 2019) after the LFA Manual, and the User Acceptance Testing AMS will be modified (UAT) [completed]. Draft based on the feedback LFA Manual, including from the departments risk-based audit and the Bank and methodology has been findings from the pilots developed. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792350 ►Strengthened public procurement framework and capacity (including training of minimum 5% female employees of the department) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Finance Department has developed SBDs for seven (07) categories of procurements namely; (i). Goods, Works, Draft SBDs for new Consulting and non- contracting methods SBDs notified and consulting services. For under preparation. Status: Delayed published. specific five (05) SBDs Explanation: Hiring of on Supply & Installation, Lack of institutionalized Consultancy firm for Database of debarred Swiss challenge, PPP Value public procurement development of SBD’s firms developed. documents, Modified training system with is under process and Annuity, IT Equipment limited outreach. will be finalized soon. Procurement capacity will be prepared by the of the officials team of experts to be No database of debarred enchanced. hired as a consultant firm firms. to support the SPFC. The hiring of consultancy firm process is in advanced stage and contract will be awarded (after the MCC). Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792351 ►Improving effectiveness of Tax Audit in the Commercial Taxes Department (CTD) (Text, Custom) 3/20/2020 Page 3 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Baseline Actual (Previous) Actual (Current) End Target Status: In advanced stage of reporting as Status: Achieved achieved Explanation: New audit Explanation: Tax Audit methodology prepared Audit hit rate improved Value Audit hit rate low (10%) Manual Draft has been and approved to 20% prepared. It is likely to be finally adopted by July 2019. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 Intermediate Results Indicators by Components Strengthening Public Financial Management Framework IN00792352 ►Implementation of a strengthened decentralized participatory planning process in Rajasthan (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Delayed but in process Explanation: The DPP The consultancy is framework and delayed and the next procedures from the Weak decentralized District level planning output will be GAP perspective of rural participatory planning under strengthened analysis and To-be report planning have been Value process and not linked to framework after which draft submitted. The the annual budget mainstreamed in framework and consultancy would process. RDPR and DoP. procedures manual will need to take up the emerge. same for urban planning and linkage with the state budget. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792354 ►Institutional strengthening of internal audit (IA) function (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved Status: Achieved Explanation: Final Explanation: Draft Draft roadmap for roadmap for strengthening IA has strengthening IA has been submitted. The been developed and consultant will Modernized Internal Audit setup needs disseminated in a incorporate the Audit Manual strengthening; Outdated workshop in April 2019. comments and developed and action Value manual, rules, circulars, The consultant will feedback received plan for and processes. incorporate the from the department implementation comments and feedback and the Bank and notified. received, and GoR will findings from the formally clear these for pilots. GoR will take piloting/ implementation. decision on the recommendations made in the final 3/20/2020 Page 4 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Roadmap and formally issue notification for implementation. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792356 ►Data for policy action (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The consultant has already been mobilized for the assignment Status: Scope/TORs “Consultancy for Data for needs revision - in Policy Action (DPA)” 10th advanced stage of May 2018. reporting as achieved The work of data Explanation: collection(secondary) Consultant Mobilized, and assessment working as per agreed including analytics is Usage of developed Administrative/MIS/trans workplan (WSPI, under progress and the indices in planning and actional data not being Prosperity Index, Value consultant has submitted monitoring; develop used for planning and Economic Review, SDI a report on Welfare plan on updating monitoring purposes. and capacity Scheme Participation indices. development). Index (WsPI) and However, the Work Strengthening Economic plan and contract Review of Rajasthan. needs amendment for The department is mid-course correction. considering revising the work plan in order to achieve the objectives under the project. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 Strengthening Expenditure and Revenue Systems IN00792353 ►Increased coverage of e-procurement (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: In advanced Status: In advanced stage of reporting as stage of reporting as achieved achieved, data to be Explanation: Project made available officials have reported Explanation: State that the e-procurement reports that the e- e-Procurement tender value in total has procurement value in Enhanced coverage of Value value in 2016-17 - INR increased by more than total has increased by e-Procurement 23,000 crores 10% over baseline during more than 10% of the the year 2018-19. A baseline during the detailed report is under year 2018-19. A data- preparation and will be based report is under submitted to Bank by preparation and will be May 31, 2019. submitted soon. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 3/20/2020 Page 5 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) IN00792355 ►Reduced delays by making awards within initial bid validity period in ten identified departments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved, being reviewed. Explanation: Amendment to the Rules under the Status: Achieved. RTTP act have been Explanation: The notified modifying the Government of 90% contracts Estimated 50% contracts thresholds and time Rajasthan has issued awarded within initial Value are awarded within initial period for submission the notification dated bid validity period in bid validity period. and mode of publicity for 06.08.2018 for the the ten departments. all procurements. These amendment in RTPP modifications now need rules. DLI achieved. to be internally reviewed after which DLI will be confirmed as achieved. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792357 ►Improved awareness of SPFC (percentage citing awareness in total users surveyed) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Enhanced awareness Survey done by of SPFC among Consumer Unity & Trust Survey to be done in Survey to be done in Value stakeholders; survey to Society International Year 3 and 5. Year 3 and 5. be conducted in Year 3 (CUTS) (12% for SPFC) and Year 5. Date 01-May-2018 17-May-2019 06-Jan-2020 31-Mar-2024 IN00792358 ►Reduction in tender notice advertisement expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved, being reviewed. Explanation: Modalities for taking appropriate Status: Expected to be actions for minimizing Achieved soon. expenditure on Explanation: The expenditure incurred Tender notice advertising are have Modalities for taking in the Year 207-18 on advertisement been finalized. appropriate actions for NIT is 0.41% of the expenditure reduced Value Necessary amendments minimizing expenditure procurement value up to 0.20% of the in the RTPP Rules have on advertising have (Rs.27,000.00 cr.) during procurement value also been prepared. been finalized. 2017-18. during 2020-21. These modifications now Orders are under need to be internally approval. reviewed after which DLI will be confirmed as achieved. Date 01-May-2018 24-Oct-2018 06-Jan-2020 31-Mar-2024 IN00792359 ►Improve debt management - Enhance transparency and systemize procedures (Text, Custom) 3/20/2020 Page 6 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Baseline Actual (Previous) Actual (Current) End Target Status: Delayed Explanation: Procurement of CSDRMS as a debt recording system was earlier considered to be procured. However, subsequent to assessment of its applicability, utility for the state and the status of use in other States, the decision was dropped. -The State instead has decided to create its Procurement of own system i.e. CSDRMS as a debt “integrated cash and recording system was debt management earlier considered to be system (ICDMS)”. procured. However, -The RFP Proposals subsequent to have been received assessment of its from prospective Debt records are manual applicability, utility for the consulting firms. and not centralized. state and the status of -The annual debt Consolidated and use in other States, the sustainability report electronic debt recording decision was dropped. (DSA) will be a part of Strengthened debt system does not exist. The State instead has the ICDMS outcomes management - reliable decided to create its own and will be prepared MTDS, DSA prepared; Value MTDS is not prepared. system i.e. “integrated accordingly. consolidated debt cash and debt -The Annual Debt database used to DSA does not include management system Statistical Bulletin will prepare analytical shocks and scenario (ICDMS)”. The EOI has be a part of the ICDMS outputs. analysis. Dedicated debt been issued, and the outcomes and will be statistical bulletin not consultant is expected to prepared accordingly. prepared. be on board by -Various specific and November 2019. Annual dedicated trainings debt sustainability report and capacity (DSA) and Annual Debt development programs Statistical Bulletin will be for the officials of the a part of the ICDMS Finance Department outcomes. who are engaged in cash and debt management functions has been envisaged under the new ICDMS assignments. Trainings have been provided to the officials on such aspects by the RBI, IMF-SARTTAC during the past year. -The specific trainings for the ICDMS will be provided once the system is created. Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 3/20/2020 Page 7 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) IN00792360 ►Improved cash management practices as measured by improved accuracy in cash flow forecasts (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Delayed Explanation: The The ICDMS will ensure ICDMS will ensure Cash flow forecasts daily cash flow daily cash flow prepared more Monthly cash flow Value statement(s) as well as statement(s) as well as accurately and error forecasts not prepared. forecasts on a rolling forecasts on a rolling margins reduced to basis for a 30-day period. basis for a 30-day less than 10%. period Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 IN00792361 ►Strengthened tax administration in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved Explanation: The Functional and institutional assessment Status: Achieved of the CTD has been Explanation: completed and the Functional and report(s) have been institutional Need to align institutional submitted to the assessment of the structure and processes Department. The ICT CTD completed Capacity of the CTD Value in the CTD to evolving upgradation was Information and strengthened. indirect tax regime. completed in September Communication 2017 with IT Hardware technology upgraded (Computer, UPS, for the CTD Scanner, printer) and IT strengthening infrastructure for Data Centre established at CTD. Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 IN00792362 ►Decline in non/stop-filers in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Risk to revenue Non/stop filers (annual A report with data and A report with data and managed by reducing returns) as percentage of relevant information is relevant information is the percentage of active dealers. Baseline Value under preparation and under preparation and non/stop filers as to be determined on the will be submitted to the will be submitted to the percentage of basis of FY 17-18 in FY Bank. Bank. registered active 2018-19. dealers to 15%. Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 IN00792363 ►Value of tax recoveries (reduction in arrears) in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/20/2020 Page 8 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Status: Data to be confirmed - In advanced stage of reporting as achieved Explanation: The demand of tax recoveries pending on Status: In advanced 31.3.19 for the year stage of reporting as 2015-16, 16-17 & 17- achieved 18 (previous 3 years) Tax arrears for last three Explanation: A report was Rs. 13,56,412.3 Tax arrears for last Value years at 57% of total with data and relevant lakhs. Against this three years reduced to arrears. information is under demand Rs 30% of total arrears. preparation and will be 5,67,552.22 have been submitted to the Bank. recovered during the year 2018-19 i.e. 42% of the arrears of as on 31.3.18 (for previous 3 years). Data needs to be confirmed and submitted to the Bank. ” Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 IN00792364 ►Strengthening of Transport Department (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved Status: Achieved Explanation: The BPR Explanation: The BPR (Business Process (Business Process Reengineering) study Reengineering) study of of the Transport the Transport Department has been Department has been The average growth in completed. The study completed. The study Growth in Transport the Transport report contains Action report contains Action Department's revenue Department revenue Plan for the Value Plan for the for FY 2021-22 over during past four years strengthening of the strengthening of the FY 2020-21 by (from 2013-14 to 2016- Transport Department. Transport Department. 14.00%. 17) is 12.24%. Various Various recommendations of recommendations of the the study report have study report have already already been been implemented by the implemented by the Department. Department. Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 IN00792365 ►Strengthening of Excise Department (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value The average growth Status: Delayed Status: Delayed Growth in Excise being the CGAR in the Explanation: The revised Explanation: EoI will Department's revenue Excise Department draft ToR was shared be floated in the month for FY 2021-22 over revenue during past with the Excise of December 2019 FY 2020-21 by three years (from 2014- department as well as ToR under final 14.00%. 15 to 2016-17) is the World Bank. The approval. 12.46%. Department will now 3/20/2020 Page 9 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) finalize the Draft ToR and subsequently the process of consultant procurement will be up taken during the current year. Date 01-May-2018 19-May-2019 06-Jan-2020 31-Mar-2024 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P156869 IBRD-88550 Effective USD 21.70 21.70 0.00 3.25 18.45 15% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P156869 IBRD-88550 Effective 01-May-2018 29-May-2018 26-Jul-2018 31-Mar-2024 31-Mar-2024 Cumulative Disbursements 3/20/2020 Page 10 of 11 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 3/20/2020 Page 11 of 11